Consulting companies driving procurement transformation
The Big Question: Digital transformation is changing the face of procurement but which consulting firm would you choose to advise you on your next steps?
Procurement consulting is big business and it certainly isn’t cheap but it can be invaluable when it comes to making decisions in numerous areas of procurement, supply chain & logistics - direct & indirect procurement, sourcing strategies, sustainability, technology platforms, risk management, contract management - they are all core parts of the procurement strategy and it’s a procurement leader’s job to figure them all out.
Procurement’s role in the enterprise has evolved. Today, CPO’s & procurement leaders are expected to work strategically as part of the c-suite to form a strategy to mitigate risk, create competitive advantage and help drive enterprise growth.
When it comes to choosing a procurement consultancy firm to help for this strategy, you need to look for a company that can help to build and manage high-performance procurement departments, develop and then deploy clear strategy and vision to become more effective and efficient as an organisation.
Six key aspects in procurement strategy:
Cloud & Cyber
Data & Data Analytics
Now, we take a look at some of the leading procurement consulting companies vying for your consulting dollars.
In no particular order, here’s some of the global players you could easily call upon:
Bain helps companies develop sourcing strategies for a sustainable future.
Bain works closely with procurement teams to identify and realise savings across all spend categories and procurement levers and they can help organisations build capabilities to make long term savings and procurement gains.
Strategic Procurement Planning
Buy Better + Spend Better
Closed Loop Savings Capture
Digital Foundation and Enablers
1000+ procurement projects across a broad range of industries.
8-12% Purchase Cost Reduction
Caperton Flood - New York
David Schannon - Silicon Valley
Chuck Miller - Boston
Borja Tramazaygues - Madrid
Gerry Mattios - Singapore
Tessa Bysong - Chicago
LinkedIn (not found)
Kelly Liu - Beijing
Phil Barton - Sydney
Accenture is a global powerhouse consulting company that helps organisations with cost-reduction and growth opportunities associated with all forms of sourcing and procurement.
Accenture’s goal is to transform sourcing and procurement from a business service to a ‘High Performance Driver’ in the business strategy.
Accenture’s procurement consulting practise focuses on the following areas:
Procurement value targeting
Procurement operating model blueprint
Supply base management
Strategic planning & sourcing for core categories
Demand management / zero-based budgeting (ZBB)
Kai Nowosel - Accenture’s own CPO *(Watch his Exclusive Video here)*
Ken White - Chicago
Sean Mckeogh - NCR, Philippines
Daan Koetsier - Brisbane
Deloitte’s procurement consulting practice helps organisations reduce their cost base and increase efficiencies by implementing fit-for-purpose solutions that are practical, affordable and results-driven.
Deloitte’s Sourcing and Procurement Strategy services include:
Direct & Indirect Materials Sourcing
Technology Enabled Transformation
M & A Related Services
Extended Business Relationship Management
Deloitte helps companies overcome the challenges of effectiveness and efficiency by looking at three key aspects:
High turnover rates
Limited supply of skilled labour and service providers
Attracting people to remote locations globally
Limited procurement negotiating power
Balancing legislation with sourcing from low cost countries for cost-saving opportunities
Coordination of global logistics & distribution networks
Planning & forecasting data
Multiple ERP Systems across organisations
Poor Data visibility
Poor Data quality
Limited ability to quantify data
Michael Dahler - New York
Merril Skyring - Sydney
Zak von Gordon - Johannesburg
EY’s procurement practice has the vision to be recognised as a ‘global leader’ in procurement, sourcing and supply chain consulting and to be regarded as the trusted business advisor in all levels of the organisation.
Their goal to do this is as follows:
Manage connected stakeholder relationships.
Provide thought leadership, experience and innovation by collaborating with stakeholders and suppliers.
Challenging the normal, challenging the status quo.
Offering transparency into the procurement process.
Providing services that can be repeated and leveraged.
EY’s procurement services provide strategic purchasing options for materials and services based on a high level of services and competitive cost, with specific skills in the following areas:
Real estate services
Travel, meeting & event services
IT & technology sourcing
Professional services, procurement and contract management
Facilities & services
Brand, marketing & communications
Ahmit Mehta - Bangalore
Glenn Coppinger - Sydney
Amanda Spencer - London
Stacy Musho - Mckinney, Texas
GEP is known to help Global Fortune 500 & Fortune 2000 enterprises to build and manage high-performance strategies with the goal of increased efficiency, more effective operations, greater strategic reach and increased impact of the businesses they work with.
GEP works with its client to map the future of procurement with a specific focus on ‘digital transformation’ as they look to embrace new and emerging digital technologies.
GEP helps its client look at ways to dramatically reorganise the procurement strategy, the procurement processes, the people, the required skill sets and all support systems.
Key goals in their record for continual digital innovation are:
Mobile & Touch Technologies
Consumerized Applications Environment
User-specific workflows and interfaces
Unified Source-to-Pay Software Platform
Other procurement & supply chain services include:
Strategic cost management
Supply risk management
BCG (Boston Consulting Group) has a pedigree in all areas of consulting, not just procurement but in the area of purchasing. Their goal is to deliver procurement solutions that don’t sacrifice quality and service.
The BCS procurement strategy is that it’s not just about cutting costs, a core procurement strategy requires a deeper look at internal needs and supply market capabilities as well as better collaboration with suppliers and internal functions.
BCG helps businesses understand how to manage fluctuating prices, volatile markets, changing technologies and globalisation through sustainable and efficient procurement solutions that don’t sacrifice quality or service.
Inside BCG, they have their own separate consulting business called Inverto, which is an international supply chain & procurement consulting company that specialises in industry, trade and the service sector.
BCG’s latest thinking on procurement transformation:
Digital procurement transformation
Supercharge savings with close supplier relationships
Procurement & supply chain data - data analytics
Empowering the people in digital procurement transformation
Focus on quality - mitigate supplier risk management
Online collaboration platforms
Daniel Weise - Dusseldorf
Wolfgang Schnellbacher - Stuttgart
Rafael Desi - Paris
Robert Tevelson - Philadelphia
McKinsey & Company
McKinsey & Company is a global management consultancy that is trusted by the world’s leading businesses, governments & institutions.
Inside McKinsey, they have a significant capacity of working inside companies from a procurement perspective but it is delivered in a slightly different way. McKinsey helps enterprises unlock the full potential of their portfolios through product and service design and transformation.
McKinsey’s roadmap to client support:
Guide the creation of exciting product and service portfolios
Increase profitability through product and service life-cycle optimisation
Improve agility and effectiveness through development
Optimise spend categories
Drive productivity and innovation with suppliers
Maximise procurement impact through agile digital operating model
20%+ improved margins from portfolio realignment.
30% quality improvement through life-cycle management.
20x ROI (Return on Investment) from next-gen operating-model implementation.
N.B. - McKinsey & Orpheus merge together for a digital procurement drive.
McKinsey and Orpheas have joined together to launch ‘Spend Intelligence by McKinsey’, a service that will enable spend transparency, spend and cost analytics, and value-capital management. This new offering combines Orpheus’s advanced platform technology with McKinsey’s industry expertise in Digital Procurement.
Bjorn-Uwe Mercker - Munich
Andre Rocha - Tokyo
Roman Belotserkovskiy - Austin, Texas
Riccardo Drentin - London
Efficio has the strapline as the world’s largest global procurement consultancy so we take a look at who they really are and what gives them the right to hang out with the other major players.
Efficio has 10 offices across Europe, North America and the Middle East and they support a range of clients including blue-chip multinationals, private equity and SME’s for all around the globe. Efficio aims to help its clients reduce costs, improve internal processing and upskill procurement teams so that they can realise faster cost savings.
Efficio’s key differentiator is their proprietary procurement technology and knowledge platform called eFlow. eFlow automates data insight generation, supports saving delivery, facilitates strong supplier relationships and manages supply chain risk.
Key aspects of eFlow are as follows:
Higher savings delivery
Sustainable procurement savings
Upskilling the procurement team
Jens Pedersen - London
Alex Klein - London
Tim von der Decken - Dusseldorf
Patrick Traynor - Philadelphia
For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”